How Blockchain, Co-Ops and 'Microsubscription' Services Could Help Artists Earn More From Music Streaming

Now, though, a growing number of smaller streaming services have emerged offering artists -- and in some cases listeners -- a better deal, using alternative ways to split up the pie. Some of these companies boast a co-op model, offering acts ownership stakes, as Jay-Z’s Tidal did when it launched in 2015 with about 16 other artist-owners including Rihanna, Madonna and Coldplay (that number has subsequently increased). Others are plotting different payment schemes, such as "micro-subscriptions" to the catalogs of individual artists. And some executives at even the biggest streaming companies have mulled over how to better funnel fans’ subscription dollars directly to the artists they stream the most. Currently, artists' royalties from streaming leaders Spotify and Apple Music are determined in part by their labels' market share, as well as their popularity compared to all the other acts in the system.

Among the newcomers is Resonate, a streaming co-op started in 2015 based out of Berlin that has made artists and listeners co-owners of the service. Cutting against the standard subscription system, Resonate offers what founder Peter Harris calls "a ‘discovery phase’ and then a ‘fans phase’" through its #stream2own model. Listeners pay 0.002 credits the first time they hear a song, a number that doubles until the ninth play, when the listener has paid a total of 1.022 credits, a number roughly equivalent to the $1.29 iTunes store download price (though Harris said that may change based on artist input,) and can now download the song or stream it free. By doing so, Resonate is able to offer acts better compensation by avoiding the market share issues that can cause inequitable distribution and cumulative payment rates more in line with download royalties than streaming ones. Resonate claims on its site that a track with 100,000 plays on Resonate will pay out $1,526, compared to a competitor’s $600.

"I was thinking about how to do a fixed rate model, that it likely was not going to be subscription based, because that was part of the issue," Harris said. "You get wildly different listening habits, you get some people that are listening an hour a day, others that got it on six hours a day, you know, how do you divide all that up?"